Torment of Conscience on the Account of Loyalty and Ethics - Research Paper Example

Ethics or Corporate Loyalty al affiliation Ethics or Corporate Loyalty Section one Nova allied Inc. (NAI) is a company that provides computer programming, networking, and support works with private and governmental agencies in Washington D.C. The company was formed in the year 1995. Until the year 2007, the company was privately owed. In a bid to secure more capital, the company decided to sell shares to the public through an initial public offering. The company’s CEO Larry Horton before the IPO started had entered into an agreement with a New York investment firm. Horton made financial targets that Wall Street would closely monitor. The company sold its stock at $ 15 per share to the public. Initially, the stock performed strongly rising steady to $ 20 per share. However, the company during the month of December faced a huge financial crisis. One of the company’s most important customers, Macro Strategy filed for bankruptcy. The company owed NAI over 60 million dollars in unsecured accounts receivables. The suspension of business by Macro Strategy would result NAI experiencing a revenue shortfall of 20 million dollars. This would affect the price of the company’s shares in the stock market and this would have huge financial implications for the company. This is due to the fact that the company’s listed on the stock exchange are required by the law to file their annual financial reports to the Securities and Exchange Commission. Nina Nguyen has been working for NAI since she graduated in the year 1997. At the time, she held a bachelor’s degree in accounting. She saw it as an opportunity to be involved in multiple accounting activities since at the time the company was small. By the year 2007, she had risen to the rank of director of accounting policy. She was responsible for coordinating the annual audit by a firm that was hired by NAI as its independent auditor. After the financial crisis that rocked the company in December 2007, the long term financial officer Mel O’Conner was dismissed. Larry the CEO of the NAI offered Nina a position as vice president of accounting. This would come with increased benefits and an increased salary. Nina would also be offered additional company shares. However, this would come at a price. Larry wanted Nina to conceal the financial situation of the company. Nina was left in a dilemma. She had worked for the company during her whole professional career. The company had paid for her MBA program and reimbursed her the full amount she incurred while studying CPA. She was also offered a full medical insurance cover for her and her children. One of her sons had a respiratory disorder. Nina was also given enough time to attend to her sick son. Being a CPA holder she has to follow a strict code of ethics that does not allow her to conceal such information. She also feared that if she did not do as requested she would be fired. She also feared that if she did as requested she would put herself in trouble with the authorities and this would tarnish her name and even cost her accounting license. Section two The invisible hand was a term that was coined by an economist by the name Adam Smith. According to Smith, as individual worked harder to become wealthier through engaging in trade and entrepreneurship, the society as a whole would benefit. Therefore, according to the theory of the invisible hand, government intervention in the economy is not necessary and the invisible hand can guide the economy by itself (Kishtainy 2012). The theory of market morality also supports the fact that the government should not intervene with the economy. According to this theory the market is usually responsible for economic growth and the eradication of poverty. On the other hand, theories of market failures and regulation of the market suggest that the market should be regulated by the government. According to both these theories, the market cannot self-regulate and there is a need for government intervention in the market (Kishtainy 2012). The market failure theory can be compared to Carroll’s view that an organization is multidimensional and priory of any business should be in the following order, economic, legal, ethical and discretionary view in order to be competitive. This supports the idea that the government should intervene and regulate the market. The market morality can be compared to Friedman’s view that a business should only be concerned with its shareholders. This supports the idea that there should be no government regulation in the market. The conduct of NAI cannot be self-regulated and there is a need for government intervention. This is a market failure situation and the government should intervene in such a situation as the market is not able to self-regulate. Section three NAI is attempting to conceal its financial information to the Securities and Exchange Commission. This is unethical and it would violate the Sarbanes-Oxley act. If the Securities and Exchange Commission would find any discrepancies in the financial report of NAI both the company and Nina would be in trouble and face prosecution in a court of law. The company might also be fined heavily for failing to comply with legal provisions of the law. Nina would be prosecuted since she is the one responsible to file such reports. This would tarnish her name and would make it impossible for her to look for a job elsewhere in future. If she agreed to falsify the report she would risk losing her CPA license and this would be against the professional work ethics of CPAs. If Nina refused to falsify the financial report she would lose her job. NAI is not acting morally. The company’s management is trying to protect is shareholders’ interest by making sure they do not incur any losses on their shares and also want to protect the reputation of the firm. However, this comes at a cost of violating the Sarbanes-Oxley act. In this case, Nina can decide to resign from her position and thus not take part in falsifying the financial information. She might also decide to stay and report the issue to the Securities Exchange Commission and hope that she will be will be protected by the whistle blowers protection contained in the Sarbanes -Oxley act. Section four Research has shown that employees with high levels of commitment are more loyal and productive. Such employees also have also a lower turnover. The concept of employee commitment is usually multi-dimensional. There are various forms of organizational commitment. Affective commitment Here, employees have are emotionally and physically attached to the organization. These employers are the highest performers in any organization since they have a sense of belonging. Continuance commitment This form of commitment creates a bond between an employee and the organization. This form of commitment is based on the fact that employees fear losing their jobs. Employees with high continuance commitment will stay at an organization as they tend to believe leaving the organization would be costly. Normative commitment Employees with normative commitment are more likely to leave an organization since they are not emotionally attached to the organization and they don’t fear losing their jobs. Nina has both affective and continuance commitment towards the organization. She has been working for the organization for 10 years. This was also her first job and this has made her have an emotional attachment with the organization. She also fears losing her job as the management allows her to take time off to take care of her sick son. The job is her only source of livelihood considering that Nina is a single parent. Her insurance cover which is paid for by the organization also helps to pay for the medical expenses of her son. Section five Nina should accept the new position since she has earned it. She is well qualified for the new post and has been in the organization for over 10 years. Her experienced is unmatched considering her qualifications. Nina has a duty to follow the rules of the accounting profession and disregard the duties that her employer wants her to perform. Yes, the fact that Nina is a single mother and has a sick child has had an impact on my recommendation. If Nina were to follow the instructions of her employer, she would get herself in trouble and risk losing her CPA license. She would also tarnish her name and would have a hard time securing another job and this would have an effect on her sick child’s well-being. Nina should report the issue to the Securities and Exchange Commission. She will be protected by the whistleblowers’ clause in the Sarbanes-Oxley act. This will enable her retain her employment as investigations are being conducted. Section six If Nina is to continue being an employee of NAI without taking part in violating the accounting rules, she has to request for family and medical leave. This will enable her to continue being an employee of NAI while also ensuring she does not take part in the violating of the accounting rules as proposed by Larry. Nina has a sick son and the organization will readily accept her request for leave considering she is a single parent and the organization is well aware of the fact that her son has a medical condition. She has been given time to go take care of her son in the past and this time would not be an exception. Reference Kishtainy, N. (2012). The economics book. New York: DK Pub.. Read More